If you are a buy-to-let landlord, you may be wondering whether it is legal for you to live in your own property. The answer is not straightforward, as it depends on a variety of factors such as your mortgage agreement, tenancy agreement, and local laws. In this article, we will explore whether it is illegal to live in your buy-to-let property and what you need to consider before doing so. Here at Aventine Property, we offer deal sourcing services- from initial research to property completion
Mortgage Agreement
One of the first things you need to consider is your mortgage agreement. Most buy-to-let mortgages have a clause stating that the property must be used solely for the purpose of letting to tenants. This means that you are not allowed to live in the property yourself, at least not without informing your lender and seeking their permission.
If you do not seek permission from your lender and choose to live in the property, you could be in breach of your mortgage agreement. This could result in your lender calling in the mortgage, requiring you to repay the entire outstanding balance, or in some cases, they may even take legal action against you.
Tenancy Agreement
Another important factor to consider is your tenancy agreement. If you already have tenants in the property, you cannot simply move in and live there without their consent. This would be a breach of their tenancy agreement, and they could take legal action against you.
If you want to move into the property yourself, you will need to terminate the tenancy agreement and provide your tenants with sufficient notice. You may also need to compensate them for any inconvenience caused by the early termination of their tenancy agreement.
Local Laws
In addition to your mortgage and tenancy agreements, you should also consider any local laws that may impact your ability to live in your buy-to-let property. Some local councils have strict rules around the use of residential properties, and they may require you to obtain special permission before you can move in.
For example, some councils require properties to be registered as HMOs (houses in multiple occupation) if they are occupied by more than one person who is not part of the same family. This can be a lengthy and expensive process, and it may not be worth it if you only plan to live in the property for a short period of time.
Insurance
It is also important to consider your insurance policy when considering living in your buy-to-let property. Most standard landlord insurance policies will not cover you if you are living in the property yourself. You may need to take out a separate insurance policy to cover you and your personal belongings.
Tax Implications
If you move into your buy-to-let property, it could have tax implications. You will no longer be able to claim tax relief on mortgage interest payments and other expenses associated with renting out the property. This could significantly increase your tax bill and eat into your profits.
If you do decide to move into your buy-to-let property, you will need to inform HMRC and adjust your tax returns accordingly. It is always best to seek professional tax advice before making any major changes to your property investments.
Conclusion
In conclusion, it is not illegal to live in your buy-to-let property, but it is important to consider your mortgage and tenancy agreements, local laws, insurance policy, and tax implications before doing so. If you are considering moving into your buy-to-let property, you should seek professional advice from a solicitor, tax advisor, and your mortgage lender to ensure that you are complying with all the relevant regulations and laws. For more understanding if it’s illegal to live in your buy to let read here.